Answer (D) is correct . A firm’s total costs consist of both variable and fixed costs. If the average fixed cost for 10,000 units is $3, the total fixed costs are $30,000. Adding the $30,000 of fixed costs to the $50,000 of variable costs produces total costs of $80,000.
Answer (A) is incorrect because This amount represents only the fixed costs.
Answer (B) is incorrect because This amount represents only the variable costs.
Answer (C) is incorrect because The total fixed costs are $30,000, not $3.
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